Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 05/01/2002, Docket: RP01-190-002, Status: Effective

First Revised Sheet No. 615 First Revised Sheet No. 615 : Effective

Superseding: Original Sheet No. 615

RATE SCHEDULE UP-1

Kern River Firm Transportation Services

(Continued)

ARTICLE III - TRANSPORTATION RATES AND CHARGES (Continued)

3.6 System Expansion. (Continued)

in-service date of such expansions. Provided, however, that (i)

Shipper may reduce its DMDQ only to the extent that Transporter

has entered into a firm transportation agreement with another

Shipper for the firm capacity which Shipper wishes to release,

and (ii) that Shipper's rights under this Section 3.6 are not

assignable pursuant to Section 15 of the General Terms and

Conditions of Transporter's Tariff.

3.6.2 Effect on Transportation Rate. Shipper shall bear no costs,

including fuel, related to an expansion of Transporter's System

for third parties if such expansion and allocation of the costs

thereof otherwise would result in an increase in Shipper's

Transportation Rate as determined pursuant to Article III.

Subject to FERC approval, costs incurred as a consequence of

expansion or increased capacity of Transporter's System shall be

rolled in rather than treated as incremental costs for purposes

of rate determination if such rolled in treatment results in a

lower overall transportation rate (inclusive of fuel) to Shipper.